Islamabad: In a move that will throw big opportunities for Indian exporters, Pakistan on Wednesday decided to allow import of 6,800 items from India against only about 1,950 at present.

The Pakistani Cabinet has unanimously approved a proposal to switch over to a negative list (NL) regime,that permits imports from India of all but 1,200 items in the NL.

Further, the NL will be phased out by the year-end, leading to the grant of the much-awaited Most Favoured Nation (MFN) to India by Pakistan.

A meeting of the Cabinet chaired by Prime Minister Yousuf Raza Gilani "unanimously approved the phasing out of the negative list" regime between Pakistan and India by December, said a brief statement issued by the Premier's office.

Welcoming Pakistan's policy initiative to liberalise bilateral trade, India's Commerce and Industry Minister Anand Sharma said that the move would open business opportunities by providing market access to Indian goods in the neighbouring country.

Sharma said that this development reaffirms the commitment of both the governments for trade normalisation.

"This will mark a dramatic shift in the lines that can be traded as now almost 90 percent items can be traded with Pakistan as opposed to 17 percent (at present)," he said.

Direct trade between India and Pakistan constitutes less than one percent of their respective global trade.

India exported goods worth USD 2.33 billion to Pakistan last year while its imports were USD 330 million.

The decision follows several rounds of talks between the Commerce Secretaries and Commerce Ministers of the two sides since April 2011.

Over 14,000 trucks of goods had crossed the Line of Control since trade between either sides of Kashmir began, she quoted Gilani as saying.

"When the direct stakeholders (in the Kashmir issue) are conducting trade, then we must protect the interests of the whole of Pakistan," she said.

Under the measures approved by the cabinet, the import of 1,209 items included in the negative list will be banned from India to protect domestic industries, Awan said. This negative list will be phased out in steps by December 31 for complete normalisation of trade with India, she said.

Prime Minister Gilani approved the negative list proposed by the Commerce Ministry after considering suggestions made by cabinet members and partners of the ruling coalition led by the Pakistan People’s Party, she said.

Awan dismissed reports about opposition to trade liberalisation from the security establishment, saying the measure would not have come before the cabinet if all stakeholders were not "on board".

Commerce Secretary Zafar Mahmood and Commerce Minister Makhdoom Amin Fahim assured the cabinet that "improving bilateral trade with India is in the best interest of Pakistan", Awan said. They further assured the cabinet that the interests of Pakistani industries will not be compromised under any circumstances, she added.

Pakistan will use several international laws – including those related to trade defence law, national tariffs, anti-dumping, countervailing duties and safeguards – to strengthen bilateral trade and to ensure that there is no unfair competition between Indian and Pakistani industries, she said.

On Wednesday’s decision will allow Pakistan to import some 6,800 items from India, sources said. Pakistan currently allows the import of a little more than 1,950 items that are included in a positive list.

The Pakistan Commerce Ministry had finalised a smaller negative list of 636 items but this was abandoned due to opposition from several stakeholders, including the Textiles and Industries Ministries, who wanted greater protection fromIndian imports.

Direct trade between India and Pakistan constitutes less than one percent of their respective global trade. India exported goods worth 2.33 billion dollars to Pakistan last year while its imports were 330 million dollars.

Following several rounds of talks between the Commerce Secretaries and Commerce Ministers, the two sides approved several steps to dismantle hurdles in the way of increasing official trade to USD 6 billion by 2014.

However, Pakistan has consciously chosen not to play up the fact that the phasing out of the negative list would lead to giving India Most Favoured Nation-status, due to opposition from several quarters, including the Defa-e-Pakistan Council, a conglomerate of hardline and extremist groups.

Lashkar-e-Taiba founder Hafiz Mohammad Saeed, who played a key role in cobbling together the Defa-e-Pakistan Council, has said the grouping will oppose any move to give India MFN-status and to open up Pakistani markets.(Agencies)